BYD makes comeback thanks to gasoline-fueled cars
BYD Co Ltd, the company best known for electric cars, is in the process of a comeback with the help of traditional gasoline-fueled vehicles. Gasoline car sales accounted for half of BYD's revenues. The recovery in sales in this area has given hope to investors that the company may be starting to live up to the promise that attracted the support and backing of big names such as Warren Buffett.
BYD's car sales jumped 25% in the first six months of this year, surpassing the 11% growth rate of China's overall auto market. More than 250,000 units were sold, the vast majority of which were gasoline-powered, not electric. Profits from the gasoline cars, as well as from selling batteries for mobile phones and other handheld devices, could be utilized for expensive research and development of electric cars, solar panels and, other green technologies, according to Reuters.
According to BYD, its first-half net profit rose to CNY426.9 million. This was beyond CNY 16.3 million it earned in the same period the previous year, which was pushed by strong auto sales and an improvement in its solar cell business.
Reuters believes that it is still too early to tell if BYD's profit rise marks the start of a sustained recovery. However, the company's shares have more than doubled in the past year on investor enthusiasm over the company's improving profitability.